Energy mutual funds are attracting increasing investor attention as global markets navigate heightened geopolitical tensions, particularly the ongoing conflict involving Iran. Historically, the energy sector has performed well during periods of geopolitical instability because such events often disrupt global oil supply and push crude prices higher. The current situation in the Middle East has reinforced that pattern, placing energy-focused investment funds back in the spotlight.
The Iran war has had a direct impact on global energy markets. Iran sits close to the Strait of Hormuz, a critical shipping route through which roughly one-fifth of the world’s oil supply passes. Any military escalation or disruption in this narrow waterway can significantly affect global oil flows and trigger price spikes in crude markets. With Iran currently blockading the Strait, oil prices have surged sharply.
These higher oil prices typically translate into improved earnings for oil and gas producers, which are the primary holdings of energy mutual funds. Recent geopolitical developments have also created a “war risk premium” in oil prices, meaning traders are willing to pay extra for crude because of supply uncertainty. As a result, energy-focused mutual funds have delivered strong returns over the past year and are increasingly viewed by investors as a strategic way to gain exposure to rising oil prices during periods of global conflict and energy market volatility.
Hence, astute investors should now invest in energy mutual funds having oil companies as their major holdings. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected three mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio.
Goldman Sachs MLP Energy Infrastructure Fund GLPAX primarily invests in global energy infrastructure securities, focusing on the energy sector while allowing limited exposure to other infrastructure companies. As of January 2026, 52% of the fund was invested in the energy sector.
Christopher A Schiesser has been the lead manager of GLPAX since 2023. Three major holdings for the fund are 12.9% in MPLX, 12.6% in Energy Transfer and 9.5% in Enterprise Products Partners.